MAR3023

Generation Y
1980-1996
marketing mix includes
product, pricing, promotion and distribution(place)
a group of people who, as individuals, or as organizations, have needs for products in a product class and have the ability, willingness, and authority to purchase such products
market
a group of people who, as individuals, or as organizations, have needs for products in a product class and have the ability, willingness, and authority to purchase such products
market
individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in daily operations.
business market
group of people or organizations for which a business creates and maintains a marketing mix specifically designed to satisfy the needs of group members
target market
a strategy in which an organization designs a single marketing mix and directs it at an entire market for a particular product
a) This mix consists of one type of product with little or no variation, one price, one promotional program aimed at everybody, and one distribution system.
b) Often include commodities and some food items such as sugar and salt
c) Must have homogenous market
undifferentiated target strategy
– a market in which a large proportion of customers have similar needs for a product
homogenous market
a market made up of individuals or organizations with diverse needs for products in a specific product class
heterogenous market
– the process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs
market segmentation
– consist of individuals, groups, or organizations that share one or more similar characteristics that cause them to have relatively similar product needs
market segmentation
a market segmentation strategy, in which an organization targets a single market segment using one marketing mix
concentrated targeting strategy
a strategy in which an organization targets 2 or more segments by developing a marketing mix for each segment
differentiated targeting strategy
characteristics of individuals, groups, or organizations used to divide a market into segments
segmentation variables
income (most used) age, gender, ethnicity, social class, occupation etc
demographic variables
region, city size, market density, climate, terrain etc
geographic variables
personality attributes, lifestyle, motives
psychological variables
volume usage, benefit expectations, brand loyalty etc
behavioristic variables
the idea that marital status and the age and presence of children influence household income and product needs
family life cycle
the number of potential customers within a unit of land area
market density
segmentation method that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information
geodemographic segmentation
an approach to market segmentation where organizations focus precise marketing efforts on very small geographic markets
micromarketing
the division of a market according to benefits that consumers want from the product
• the benefits consumers seek ARE their product needs
• ex: Tylenol cold and flu provides the benefit of ridding cold and flu to consumers (segment is for consumers who have a cold or flu)
benefit segmentation
total amount of a product that customers will purchase within a specified period at a specific level of industrywide marketing activity
a) Expressed in dollars or units
market potential
the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product
company sales potential
measuring company sales potential based on general economic forecast for a specific period and the market potential derived from it
breakdown approach
measuring company sales potential by estimating how much of a product a potential buyer in a geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered
buildup approach
are theyre already competitors in the segment? What are their prices, can I compete in this segment? Is it worth to enter this segment?
competitive assessment
creating and maintaining a certain concept of a product in customers minds
product positioning
changing a products target market and altering the perception of the product and who it is for
repositioning
the amount of a product a company expects to sell during a specific period at a specified level of marketing activity
sales forecast
5 steps of target market selection process
• Identity targeting strategy, pick which segmentation variables to use, develop market segment profiles, evaluate relevant profiles, select specific target markets
• 5 categories of sales forecasting:
executive judgment, surveys, forecasting surveys, regression analysis, and market tests
a sales forecasting method based on the intuition of one or more executives (fastest and cheapest)
executive judgements
a survey of customers regarding the types and quantities of products they intend to buy during a specific period
customer forecasting survey
a survey of a firms sales force regarding anticipated sales in their territories for a specific period
a) Sales team is closest to a company’s actual customers
sales force forecasting survey
sales forecasts prepared by experts outside the firm, such as economists, management consultants, advertising executives, or college professors
expert forecasting survey
experts make forecasts and submit them to the company, the company then compares them with their own and sends them back to the experts for final analysis (most accurate)
delphi technique
a forecasting method that uses historical sales data to discover patterns in the firms sales over time and generally involves trend, cycle, seasonal, and random factor analysis (assumes previous sales patterns will keep occurring)
time series analysis
Trend analysis
analysis that focuses on aggregate sales data over a period of many yeas to determine general trends in annual sales
Cycle analysis
an analysis of sales figures for a 3-5 year period to ascertain whether sales fluctuate in consistent & periodic manner
Seasonal analysis
analysis of daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors influence sales
Random factor analysis
an analysis attempting to attribute erratic sales variations to random, nonrecurring events
Regression analysis
a method of predicting sales based on finding a relationship between past sales and one or more independent variables such as population or income
Market test
making a product available to buyers in one or more test areas and measuring purchases and consumer responses to marketing efforts
Buying behavior
the decision processes and actions of people involved in buying and using the products
Consumer buying behavior
the decision processes and purchasing activities of people who purchase products for personal or household use and not for business purposes
consumer buying decision process
a 5 stage purchase decision process that includes problem recognition, information search, evaluation of alternatives, purchase, and postpurchase evaluation
Problem recognition
Occurs when a buyer becomes aware of a difference between a desired state and an actual condition. (ex: new iphone comes out and you want it)
Internal search
an information search in which buyers search their memories for information about products that might solve their problem Ex: memory and past experiences
External search
information search in which buyers seek information from sources other than their memories Ex: friends, internet, consumer reports, magazines, etc…
Consideration set (evoked set)
a group of brands within a product category that a buyer views as alternatives for possible purchase
Evaluation criteria
objective and subjective product characteristics that are important to a buyer
Framing
companies use this method to stress certain characteristics about their produce (such as safety of car, or pixels on camera)t to influence buyers
Cognitive dissonance
a buyers doubts shortly after a purchase about whether the decision was the right one
Situational influences
influences that result from circumstances, time, and location that affect the consumer buying decision process
Psychological influences
factors that in part determine peoples general behavior, thus influencing their behavior as consumers
Perception
the process of 1)selecting, 2)organizing, and 3)interpreting, information inputs to produce meaning
information inputs
sensations received through sight, taste, hearing, smell, & touch
Selective exposure
the process by which some inputs are selected to reach awareness and others are not
Selective distortion
an individual’s changing or twisting of information that is inconsistent with personal feelings or beliefs Ex: Consumer may stay loyal to coke even if statistics were to prove pepsi is better, cheaper, healthier, taste 100% the same etc
Selective retention
remembering information inputs that support personal feelings and beliefs and forgetting inputs that do not
closure
organization method where one mentally fills in the missing elements of a pattern or statement
Motives
an internal force that directs a personals behavior towards satisfying needs or achieving goals
Patronage motives
motives that influence where a person purchases products on a regular basis
Maslows hierarchy of needs
the 5 levels of needs that humans seek to satisfy, from most to least important
Physiological needs (least)
survival such as food, water, shelter etc
Safety needs
life insurance, freedom from physical or emotional harm, air bag
Social needs
love, affection, and a sense of belonging
Esteem needs
require respect and recognition from others, flying first class
Self actualization needs
the need to become all you are capable of & develop
Learning
changes in an individual’s thought processes and behavior caused by information and experience
Attitudes
an individuals enduring evaluation of feelings about and behavioral tendencies toward an object or idea
Three major components of attitude:
cognitive, affecting and behavioral
Attitude scale
a means of measuring consumer attitudes by gauging the intensity of individuals’ reactions to adjectives, phrases, or sentences about an object
personality
a set of internal traits and distinct behavioral tendencies that result in consistent patterns of behavior in certain situations
Types of personalities
compulsive, ambition, gregariousness, dogmatism, authoritarian, introvert, extrovert
Self concept (self image)
a perception or view of ones self
Lifestyles
an individual’s pattern of living expressed through activates, interests, and opinions
level of involvement
an individuals degree of interest in a product and the importance of the product for that person
High involvement products
tend to be visible to others and expensive Ex: Cars, clothing, furniture, health care, housing, lawyers
Low involvement products
less expensive and less social risk Ex: Toilet paper, groceries,
Enduring involvement
when a persons interest in a product has been ongoing and long term
Situational involvement
temporary and dynamic interest in a product Ex: Need to buy a car after getting into a car accident
Routinized response behavior
a consumer problem solving process used when buying frequently purchased, low cost items that require very little search and decision effort
Limited problem solving
a consumer problem solving process used when purchasing products occasionally or needing information about an unfamiliar brand in a familiar product category Ex: New laundry detergent by tide
Extended problem solving
a consumer problem solving process used when purchasing unfamiliar, expensive, or infrequently bought products Ex: car, home, or college education
Impulse buying (not a problem solving method)
an unplanned buying behavior resulting from a powerful urge to buy something immediately
social influences
the forces other people exert on ones buying behavior
5 major areas:
roles, family, reference groups, and opinion leaders
Roles
actions and activities that a person in a particular position is supposed to perform based on expectations of the individual and surrounding persons
Consumer socialization
the process through which a person acquires the knowledge and set of skills to function as a consumer
Family making decisions grouped into 4 categories:
autonomic(both equally likely to make decision), husband dominant, wife dominant, syncretic (make decision together);75% of women make the consumer buying decisions
Reference group
a group that a person identifies with so strongly that he or she adopts the values, attitudes, and behavior of group members.
3 types of reference groups:
membership, aspirational, disassociative
Membership:
individual actually belongs, individual identifies with group members enough to adopt group values and attitudes
Aspirational
group where individual aspires to belong to and wants to be in
Disassociated
negative group and individual does not want to identify with this group or adopt values
Opinion leaders
a member of an informal group who provides information about a specific topic to other group members;Most influential when consumers have high product involvement but little knowledge Ex: opinion leaders could be: sorority president, “movie buff friend”, priest
Social classes
an open group of individuals with similar social rank; “open” because people can move into and out of each class
Social stratification
action of ranking people/groups into classes
3 major classes:
upper, middle, lower class
Culture
the accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society used to cope with its environment and passes onto future generations; Example of objects: food, furniture, clothing;Example of concepts: education, welfare, laws, core values
Subculture
a group of individuals whose characteristics, values, and behavioral patterns are similar within the group and different from those of people in surrounding culture; Example of subcultures: college students, teenage, Asians, west coast
3 fastest growing subcultures:
African americans, Hispanics, Asians
African American subculture:
12.3% of population
Spending habits
depreciable products such as food, clothing, entertainment etc
Hispanic subculture:
15.1% of population
Spending habits
housing, groceries, telephone services, baby cloths and shoes etc
Asian American subculture
4.4% of population
consumer misbehavior
behavior that violated generally accepted norms of society Ex: shoplifting, buying drugs, consumer fraud, pirating music and software; Abusive consumers who threatens or does not comply with workers
international marketing
developing and performing marketing activities across national boundaries
CIBER
centers for international business education & research
Forces that affect the marketing environment include
sociocultural; economic; political, legal, and regulatory; social and ethical, competitive, and technological
Some cultures influence buying behavior due to different ____
beliefs, values etc
Import tariff
a duty levied by a nation on goods bought outside its borders and brought into the country; Used to raise revenue or protect domestic products
Quota
a limit on the amount of goods an importing country will accept for certain product categories in a specific period of time
Embargo
a governments suspension of trade in a particular product or specific country
Exchange controls
government restrictions on the amount of a particular currency that can be bought or sold
Balance on trade
the difference in value between a nations imports and exports; Favorable balance = exports > imports
Self reference criterion (SRC)
idea that “we” differ from “them; Relates to how people think of other people/business in other countries
Cultural relativism
the concept that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures
Business for social responsibility (BSR)
tracks emerging issues and trends, provides information on corporate leadership and best practices, and helps businesses develop practical social and ethical practices
Switzerland
______ ranked #1 most competitive country in the world
2nd
USA ranked ___ most competitive country in the world
The north American free trade agreement (NAFTA)
an alliance that merges Canada, Mexico, and the united states into a single market; Virtually no trade tariffs is trading amongst each other
European union (EU)
an alliance that promotes trade among its member countries in Europe;Often called the “European community” or “open market”
The common market of the southern cone (MERCOSUR)
an alliance that promotes the open trade and production in its member nations in South America
The asia pacific economic cooperation (APEC)
An alliance that promotes open trade and cooperation among member nations throughout the world
World trade organization (WTO)
an entity that promotes free trade among member nations by eliminating trade barriers and education individuals, companies, and governments about trade rules around the world;Successor to GATT
General agreement on tariffs and trade (GATT)
an agreement among nations to reduce worldwide tariffs and increase national trade; Prevents dumping; Dumping- selling products at an unfairly low price
successive stages of entering international markets
1) no regular export activities 2) export via independent representatives (agents) 3) establishment of one or more sales subsidiaries internationally 4) establishment of international production/manufacturing alliances
importing
purchasing products from a foreign source
exporting
the sale of products to foreign markets
trading company
a company that links buyers and sellers in different countries; Does not help in manufacturing the goods
Licensing
an alternative to direct investment that requires a license to pay commissions or royalties on sales or supplies used in manufacturing
Licensee
the owner of the foreign operation Ex: The Olympic committee gives licenses to certain organizations that make shirts for the Olympics and sells them for a profit. The committee makes money from this by charging for the license and making money on royalties
franchising
a form of licensing in which a franchiser, in exchange for a financial commitment, grants a franchisee the right to market its product in accordance with the franchisers standards
contract manufacturing
the practice of hiring a foreign firm to produces a designated volume of the domestic firms product or a component of it to specification, the final product carries in the domestic firms name
Outsourcing
the practice of contracting noncore operations with an organization that specializes in this operation Ex: Google uses a 3rd party accounting firm to do its income statements
offshoring
the practice of moving a business process that was done domestically at the local factory to a foreign country, regardless of whether the production accomplished in the foreign country is performed by the local company or third party.
offshore outsourcing
the practice of contracting with an organization to perform some or all business functions in a country other than the country in which the product or service will be sold
joint ventures
a partnership between a domestic firm and a foreign firm or government
Strategic alliance
a partnership that is formed to create a competitive advantage on a worldwide basis
Direct ownership
a situation in which a company owns subsidiaries or other facilities over seas
Multinational enterprise
a firm that has operations or subsidiaries in many countries Ex: BP is a multi national enterprise as it has stations in USA & Europe
3 basic structures of international organization exists:
export departments, international divisions, and internationally integrated structures
International divisions
centralizes all of the responsibility for international operations
Product division structure
most used; works well with diversified firms with many different products. Ex: proctor and gamble
Geographic area structure
works well with non diversified firms, world is divided into logical geographic areas
Global matrix structure
implements both product and geographic structure at the same time ex: used by a firm called Asea Brown Boveri (ABB)
globalization
the development of marketing strategies that treat the entire world (or its major regions) as a single entity Ex: MacDonalds and Nike are globalized and produce same products world wide
Digital media
electronic media that function using digital codes; media available via smartphone, computers, or any other electronic device
Digital marketing
uses all digital media, including the internet and mobile interactive channels to develop communication and exchanges with customers
electronic marketing ( E marketing)
the strategic process of distributing, promoting, pricing products, and discovering the desires of customers using digital media and digital marketing
Characteristics of E-Marketing:
include addressability, interactivity, accessibility, connectivity, and control
addressability
the ability of a marketer to identify customers before they make a purchase; marketer knows who the customer is and can specifically address that customer
social network
web based meeting place for friends, family, coworkers, and peers that allow them to communicate for their respective purposes
interactivity
allows the customers to express their needs and wants directly to the firm in response to its marketing communications ex: online chats, blogs, forums
accessibility
the ability to obtain digital informaiton
connectivity
use of digital networks to provide linkages between information providers and users ex: many firms use Facebook or twitter to communicate messages/advertisements
control
customers’ abilities to regulate the information they view and the rate and sequence of their exposure to that information;
pull medium
internet is refered to a _____ because users choose what websites that go to and the marketer loses control of which content the user is exposed to and in what sequence
“enterprise 2.0”
term used to desrcribe a firms’ efforts to use cutting edge technology associated with social networks and blogs to assist in workplace connections-social networks
Blogs (weblogs)
web based journals in which writers editorialize and interact with other internet users
Wiki
type of software that creates an interface that enables users to add or edit the content of some types of websites Ex: Wikipedia.com allows users to change the content
podcast
audio or video file that can be downloaded from the internet with a subscription that automatically delivers new content to listening devices or personal computers; podcast offer the benefit of convenience, giving customers power to listen or view content wherever they choose. CBC radio, NPR,PBS
virtual realities
include role playing games such as SimCity and world of warcraft
Creators, critics, collectors, joiners, spectators, inactive
Social technographics profile groups people into 6 categories according to how they interact with digital media:
Creators
create their own media outlet such as blogs, podcasts, wikis etc
Critics
comment on blogs and post ratings and reviews
Collectors
organize and gather information created by creators and critics
Joiners
anybody joining myspace or twitter, or FB etc
Spectators
read what others produce but do not produce anything of their own
Inactives
don’t participate in any of these activities
Push and pull
Distribution is a ____ and ____ dynamic
Content
Marketers push to get the _____ in front of the consumer
crowdsourcing
refers to the way digital media can be used to outsource tasks to a large group of people Ex: crowdspring.com allows users to post projects they need done and how much they are willing to pay for them and then people are allowed to choose whether to do the work or not
Ethical and legal issues
online fraud
any attempt to conduct fraudulent activities online, including deceiving consumers into releasing personal information Known as “cyber criminals”
product
a good, service, or idea received in an exchange
good
a tangible physical entity ex: book, magazine, video game
service
an intangible result of the application of human and mechanical efforts to people or objects ex: hotels trying to accommodate you, manicure/pedicure etc
idea
a concept, philosophy, image, or issue ex: Mothers against drunk driving
supplemental features
these can include installation, delivery, financing, etc
symbolic and experimental benefits
some products provide symbolic meaning ex you can buy a teddy bear anywhere but at “build a bear” you can choose any kind of teddy bear, size, and stuff it yourself ex: a rolex is not simply just to tell time, it provides symbolic meaning of success
consumer and business products
2 general categories of products:
Consumer products
products purchased to satisfy personal and family needs
Business products
products bought to use in a firms operations, to resell, or to make other products
Convenience products
relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort; usually found at retail stores Ex: chewing gum, bread, soft drinks, newspapers, gas etc
Shopping products- items for which buyers are willing to expend considerable effort in planning and making purchases; buyers spend time comparing brands and prices; last a relatively long time Ex: Furniture, appliances, cameras, shoes etc
Specialty products
items with unique characteristics that buyers are willing to expend considerable effort to obtain
Unsought products
products purchased to solve a sudden problem, products of which customers are unaware, and products that people do not necessarily think of buying Ex: a new radiator if yours breaks on the highway, medicine if you get the flu
Installations
facilities and non-portable major equipment; decisions made by top level management because these products are expensive and intended for long use Ex: buildings, factories, and very large machines
Accessory equipment
equipment that does not become part of the final physical product but is used in production or office activities Ex: calculators, tools, file cabinets etc
Raw materials
basic natural materials that become part of a physical product Ex: Minerals, chemicals, agricultural products and materials from forest & oceans
Component parts
items that become part of the physical product and are either finished items ready for assembly or items that need little processing before assembly Ex: brakes, spark plugs, tires are all component parts of an automobile
Process materials
materials that are used directly in the production of other products but not readily identifiable Ex: Caesar salad dressing has a little bit of vinegar in it; but the vinegar is not identifiable
MRO supplies
maintenance, repair and operating items that facilitate production and operations but do not become part of the finished product Ex: paper, pencils, cleaning agents and paint all fall into this category Ex: febreeze is an MRO supply to hotels but is a consumer good to us
Business services
intangible products that many organizations use in their operations Ex: Janitorial services, financial services, law services etc
product item
a specific version of a product that can be designated as a distinct offering among a firms products
Product line
a group of closely related product items viewed as a unit because of marketing, technical, or end- use considerations Ex: Colgate tooth whitening, Colgate cavity control, Colgate sensitive gums, etc Ex: proctor and gamble detergent line includes: tide, bold, cheer, gain, and era
product mix
the composite, or total, group of products that an organization makes available to customers
Width of product mix
the number of product lines a company offers Ex: GE has different types of products including houseware, healthcare, commercial
depth of product mix- the average number of different products offered in each product line
Product life cycle
the progression of a product through 4 stages: introduction, growth, maturity, and decline
introduction stage
the initial stage of a products life cycle; its first appearance in the marketplace when sales start at zero and profits are negative
growth stage
the product life cycle stage when sales rise rapidly, profits reach a peak and then they start to decline; Profits start to decline at end of this stage when other competitors enter the market
maturity stage
the stage of a products life cycle when the sales and curve peaks and starts to decline, and profits continue to fall
• Characterized by intense competition
• Companies begin using promotional or globalizing
a)Generate cash flow b) Maintain share of market c) Increase share of customer
3 objectives of companies in maturity stage
decline stage
the stage of a product life cycle when sales fall rapidly
product adoption process
5 stage process of buyer acceptance of a product: awareness, interest, evaluation, trial, adoption
Awareness
buyer becomes aware of a new product
Interest
buyer seeks information about new product
Evaluation
buyer decides to use new product or not
Trial
buyer tries new product to see if it meets his/her needs
Adoption
buyer tries product, likes it, and is expected to buy it again
Innovators
first adopters of new technology
Early adopters
people who adopt new products early, choose new products carefully, and are viewed as “the people to check with” by later adopters
early majority
individuals who adopt a new product just prior to the average person
late majority
skeptics who adopt new products when they feel it is necessary
laggards
the last adopters who distrust new products
Line extension
development of a product that is closely related to other products in the line but is design specifically to meet different customer needs
For example the Porsche cayenne S Hybrid V-1 can drive short distance
Product modification
changes in one or more characteristics of a product. Example: Ford 2011, Ford 2012
Quality
changes to a product’s dependability and durability
Functional
changes affecting a product’s versatility, effectiveness, convenience, or safety
Aesthetic
changes relating to the sensory appeal of a product
New product
an innovative product that has never been sold by an organization, such as the digital camera was when introduced for the first time. A product that a given firm has not marketed previously, although similar products have been available from other companies, such as Crayola School Glue
New-product development process
a seven phase process for introducing products:
Idea generation
seeking product ides to reach organizational objectives
May come from
Internal sources, franchisees in the restaurant business,competitors,advertising agencies,etc…
Screening
selecting the ideas with the greatest potential for further review
Concept testing
seeking a sample of potential buyers’ responses to a product idea
Business Analysis
evaluating the potential impact of a product idea on the firm’s sales, costs, and profits
Product development
determining if producing a product is technically feasible and cost effective
Test marketing
a limited introduction of a product in geographic areas chosen to represent the intended market
Commercialization
refining and finalizing plans and budgets for full-scale manufacturing and marketing of a product
Roll-out
a product is introduced in stages, starting in one set of geographic areas and gradually expanding into adjacent areas.
Product differentiation
creating and designing products so that customers perceive them as different from competing products
Product Quality
the overall characteristics of a product that allow it to perform as expected in satisfying customer needs
Level of quality
the amount of quality a product possesses
Consistency of Quality
the degree to which a product has the same level of quality over time
Product design
how a product is conceived, planned, and produced
Styling
the physical appearance of the product
Product features
specific design characteristics that allow a product to perform certain tasks
Customer services
any human or mechanical efforts or activities a company provides that add value to a product.
Product deletion
eliminating a product from the product mix when it no longer satisfies a sufficient number of customers
Phase out, run it out or immediate drop
A product can be deleted in 3 ways:
Phase-out
allows product to decline without change in the marketing strategy, no attempt to give product new life.
Run it out
exploits any strengths left in the product
Product manager
the person within an organization who is responsible for a product, a product line, or several distinct products that make up a group
Brand manager
person responsible for a single brand
Market Manager
the person responsible for managing the marketing activities that serve a particular group of customers
Venture team
a cross functional group that creates entirely new products that may be aimed at new markets;Responsible for all aspects of developing a product
Service
an intangible product that involves a deed, a performance, or an effort that can’t be physically possessed.
a service is dominated by the intangible portion of the total product
The primary difference between a service and a good is that:
Customer service
involves any human, mechanical, or electronic activity that adds value to the product..
Sevice economy
U.S. is called the world’s first _____.
Long term economic growth
One major catalyst in the growth of consumer services has been ______
Business services
include support and maintenance, consulting, installation, equipment leasing, marketing research, advertising, temporary office personnel, and janitorial services.
Risen even farther
Expenditure for business services have ______ than expenditures for consumer services.
Business environment
The growth in business services has been attributed to the increasingly complex, specialized, and competitive _________.
Distribution
the decisions and activities that make products available to customers when and where they want to purchase them.
Intangiabiltity
means a service that is not physical and therefore can’t be perceived by the senses.
Inseparability of production and consumption
the production of a service cannot be separated from its consumption by customers.
Perishability
the unused service capacity of one time period cannot be stored for future use. For instance, empty seats on an airline flight today cannot be stored and sold to passengers at a later date.
Heterogenity
variation in quality. For instance, today you get a great haircut, but next month you go to get a haircut from the same hairstylist and this time around it is terrible.
increases, increases
Heterogenity usually _____ as the degree of labor intensiveness ______.
Client-Based relationships
interactions that result in satisfied customers who use a service repeatedly over time. For instance, you use a lawyer and receive great service. From now on you decide to keep using him as your lawyer and recommend him to other family members and friends.
Customer contact
refers to the level of interaction between service providers and the customer necessary to deliver the service.
Employee satisfaction is the single most important factor in providing high-service quality.
Core service
the basic service experience or commodity that a customer expects to receive.
Supplementary service
a supportive one related to the core service and is used to differentiate the service bundle from competitors. For example, when a student attends a tutoring session for a class, the core services is the tutoring. Bundled with the core service might be access to outlines with additional info, handouts with practice questions, or online service.
no face-to-face contact between the customer and the service provider
Some services are provided at an “arm’s length” meaning _______
degree of personalization
When designing service delivery, marketers must pay attention to the ______ customers desire.
Promotion of services
typically includes tangible cues that symbolize the service.
Pricing of services
should be priced with consumer price sensitivity, the nature of the transaction, and its costs in mind.
Demand-based pricing
when demand is high price is high and vice versa.
Peak demand
time period when customers tend to desire a service the most
Service quality
is defined as customers’ perceptions of how well a service meets or exceeds their expectations.
Search qualities
tangible attributes such as color, style, size, feel, or fit that can be evaluated prior to purchase.
Experience qualities
are attributes, such as taste, satisfaction, or pleasure, that can be assessed only during the purchase and consumption of a service. For instance restaurants and vacations.
Credence qualities
attributes that customers may be unable to evaluate even after the purchase and consumption of the service. For instance, surgical operations, automobile repairs, and legal representation.
Tangibles, reliability, responsiveness, assurance, empathy
Five dimensions consumer use when evaluating service quality:
Tangiables
physical evidence of the service
Reliability
(most important) consistency and dependability in performing the service
Responsiveness
willingness or readiness of employees to provide service
Assurance
ability to convey trust and confidence
Empathy
caring and ind. Attention provided by employee
Analysis of customer expectations
desired and acceptable expectations. Diff between the two is called the customer’s zone of tolerance.
Nonprofit marketing
refers to marketing activities that are conducted by ind. And organizations to achieve some goal other than ordinary business goals such as profit, market share, or return on investment.
Non profit- organization marketing: is the use of marketing concepts and techniques by organizations whose goals do not include making profits.
Social marketing
promotes social causes, such as AIDS research and recycling.
is to obtain a desired response from a target market
The basic aim of nonprofit organization:
Target public
a collective of ind. who have an interest in or a concern about an organization, a product, or a social cause.
client publc, general publics
In nonprofit marketing, direct consumers of the product are called ______and indirect consumers are called _______.
Student body
The client public for a university is its: , and its general public includes parents, alumni, and trustees.
Variable pricing
when a donation-seeking organization will accept a contribution of any size and not their usual fixed donation.
Opportunity cost
the value of the benefit given up by selecting one alternative over another.
Brand
is a name. term, design, symbol, or any other feature that identifies one marketer’s product as distinct from those of other marketers. It may identify a single item, family of items, or all of a seller’s items.
Brand name
is the part of a brand that can be spoken-including letters,numbers, and words-such as 7Up.Often a product’s only distinguishing characteristic.
Brand mark
the element of a brand that is not made up of words-often a symbol or design. Examples are: McDonald’s golden arches, Nike’s “swoosh”, and the stylized silhouette of Apple’s iPod.
Trademark
a legal designation indicating that the owner has exclusive use of a brand or part of a brand, and others are prohibited by law from using it.
Trade name
is the full legal name of an organization, such as Ford Motor Company.
Cultural branding
explains how a brand conveys a powerful myth that consumers find useful in cementing their identities.
Branding loyalty
is a costumer’s favorable attitude towards a specific brand.
Brand recognition, brand preference, brand insistence
Three degrees of brand loyalty exist:
Brand recognition
occurs when the customer is aware that the brand exist and views it as an alternative purchase if the preferred brand is unavailable or if the other available brands are unfamiliar.
Brand preference
stronger degree of brand loyalty. Customer has definite preference of one brand over all others and will buy it if available. However if not available will buy a substitute.
Brand insistence
costumer strongly prefers one brand, will buy no substitute, and will spend the time and effort necessary to acquire it.
Brand equity
is the marketing and financial value associated with a brand’s strength in a market.
1.Brand-name awareness 2.Brand loyalty 3.Perceived brand quality 4. Brand associations
Four major elements underlie brand equity:
Maufacturer, private, generic, individual
Types of Brands:
Manufacturer brands
are initiated by producers and ensure that producers are identified with their products at the point of purchase-For example, Green Giant, Compaq Computer, and Levi’s jeans.
Private distributor brands
( store brands, dealer brands) are initiated and owned by resellers- that is, wholesalers or retailers.
manufacturers
The major characteristic of private brands is that the _______ are not identified on the products.
Generic Brands
indicate only the product category(such as aluminum foil) and do not include the company name or other identifying terms.
Trademark Law Revision Act
add value to federal registration system and
to better protect the public from counterfeiting, confusion, and deception.
Individual Branding
is a strategy in which each product is given a different name. For instance, Sara Lee uses individual branding among its many divisions, which include Hanes underwear, L’eggs pantyhose, Champion sportswear, Jimmy Dean, Bali, Ball Park, and other vastly diverse brands.
Family Branding
all of a firm’s products are branded with the same name or part of the name such as Kellogg’s Frosted Flakes, Kellogg’s Rice Krispies, and Kellogg’s Corn Flakes.
Brand extension
occurs when a firm uses one of its existing brands to brand a new product in a different product category. For example, Bic, the maker of disposable pens, employed a brand extension when it introduced Bic disposable razors and lighters.
Line extension
same brand on a new product in the same product category. For example the new Extra strength Tylenol P.M.
Co-Branding
the use of two or more brands on one product.
Brand liscensing
an agreement in which a company permits another company to use its brand on other products for a licensing fee. Examples are: The NFL, NBA, NCAA
Packaging
involves the development of a container and a graphic design for a product.
protecting the product and maintaining its functional form; To offer convenience to consumers ;To promote a product by communicating its features, uses, benefits, and image
Three main packaging functions:
Family packaging
using similar packaging for all of a firm’s products or packaging that has one common desing element. For instance, Campbell’s soups, Weight Watcher’s foods, and Planter’s nuts.
Secondary
use packaging: can be re used for purposes other than its initial function. For example,margarine container can be used to store leftovers, and a jelly container can serve as a drinking glass.
Category
consistent packaging: the product is packaged in line with the packaging practices associated with a particular product category. For example, ketchup, mustard, and mayonnaise.
Innovative packaging
a marketer employs a unique cap, design, applicator, or other feature to make a product distinctive.
Handling-improved packaging
a product’s packaging may be changed to make it easier to handle in the distribution channel- for example, by changing the outer carton or using special bundling, shrink-wrapping, or pallets.
Labeling
is very closely interrelated with packaging and is used for identification, promotional, informational, and legal purposes.
Universal product code
a series of electronically readable lines identifying the product and providing inventory and pricing information.
Supply chain
all the activities associated with the flow and transformation of products from raw materials through to the end customer.
Operations management
the total set of managerial activities used by an organization to transform resource inputs into products.
Logistics management
planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers’ needs and wants.
Supply management
in the broadest terms, refers to the process that enables the progress of value from raw material to final customer and back to redesign and final disposition.
Supply-chain management
a set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and at the right time.
Upstream firms
provide direct or indirect input to make the product.
Downstream firms
responsible for delivery of product and after-market services to the end customer.
Marketing channel
(channel of distribution or distribution channel) a group of individuals and organizations that direct the flow of products from producers to customers within the chain supply.
Marketing channels
Major role of ________ is to make products available at the right time at the right place in the right quantities.
Direct
Some marketing channels are _____, meaning that the product goes directly from the producer to the consumer.
Marketing intermediaries
middlemen that link producer to other intermediaries or ultimate consumer through contractual arrangements or through the purchase and resale of products.
Time, Place, possession, form
Marketing channels create four types of utility:
Time
available when costumers want them
Place
where customers want the products
Possession
customer has access to product to use or store for future use
Form
assembling, preparing, or otherwise refining the products to suit individual customer needs.
Industrial Distributor
an independent business organization that takes title to industrial products and carries inventory. They usually sell standardized products such as maintenance supplies, production tools, and small operating equipment.
Manufacturers agent
an independent businessperson who sell complementary products of several producers is assigned territories and is compensated through commissions.
Dual distribution
the use of two or more marketing channels to distribute the same products to the same target market. For instance, Kelloggs sells it cereal directly to large retail grocery chains and to wholesalers that, in turn sell the cereals to retailers.
Strategic channel alliance
an agreement whereby the products of one organization are distributed through the marketing channels of another.
Intensity of market coverage
is the number and kinds of outlets in which a product will be sold.
Intensive distribution
using all available outlets to distribute a product. Used a lot for convenience products
Selective distribution
using only some available outlets in an are to distribute a product. Appropriate for shopping products(T.V., stereo, etc..)
Exclusive Distribution
using a single outlet in a fairly large geographic area to distribute a product.
Channel captain
the dominant leader of a marketing channel or a supply channel (Producer, wholesaler, retailer)
Channel power
the ability of one channel member to influence another member’s goal achievement
Vertical channel integration combining two or more stages of the marketing channel under one management. Eliminating the need for that particular intermediary.
Vertical marketing systems
a marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers.
Corporate, administered and contractural
Most vertical marketing systems take one of the 3 forms:
Corporate
combines all stages of the marketing channel, from producers to consumers, under a single owner.
Administered
channel members are independent , but a high level of interorganizational management is achieved through informal coordination.
Contractual
most popular, channel members are linked by legal agreements spelling out each member’s rights and obligations.
Horizontal channel integration
combining organizations at the same level of operation under one management. For instance, owner of a dry-cleaning firm buys other existing dry-cleaning firms.
Physical distribution
(Logistics) activities used to move products from producers to consumers and other end users.
Outsourcing
the contracting of physical distribution tasks to third parties.
transportation
_______ is the most costly part of the physical distribution cycle time.
Cycle time
the time needed to complete a process
Order processing
the receipt and transmission of sales order information.
order entry, order handling, and order delivery
Order processing entails three main task
Electronic data interchange(EDI)
a computerized means of integrating order processing with production, inventory, accounting, and transportation.
Inventory management
developing and maintaining adequate assortments of products to meet customers’ needs.
Stockouts
shortages of products that, in turn, can result in brand switching, lower sales, and loss of customers.
Reorder point
the inventory level that signals the need to place a new order
Order lead time
refers to the average time lapse between placing the order and receiving it.
Usage rate
the rate at which a product’s inventory is used or sold during a specific time.
Safety stock
the amount of extra inventory a firm keeps to guard against stockouts.
Reorder point
(order lead time*usage rate) + safety stock
Just-in-time
an inventory-management approach in which supplies arrive just when needed for production or resale.
Materials handling
physical handling of tangible goods, supplies, and resources.
Unit loading
one or more boxes are placed on a pallet or skid, and later transported.
Containerization
the consolidation of many items into a single, large container that is sealed at its origin point and opened at its destination.
-Warehousing -the design and operation of facilities for storing and moving goods.
Private warehouses
company-operated facilities for storing and shipping products.
Public warehouses
storage space and related physical distribution facilities that can be leased by companies.
Bonded storage
a warehousing arrangement in which imported or taxable products are not released until the products’ owners pay U.S. customs, duties, taxes, or other fees.
Distribution centers
arge, centralized warehouses that focus on moving rather than storing goods.
Transportation
the movement of products from where they are made to intermediaries and end users.
Intermodal transportation
2 or more transportation modes used in combination
Piggyback
shipping that uses truck trailers and railway flatcars
Fishyback
trucktrailers and water carriers
Birdyback
truck trailers and air carriers
Freight forwarders
organizations that consolidate shipments from several firms into efficient lot sizes.
Megacarriers
freight transportation firms that provide several modes of shipment
Tying agreement
an agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well.
Full-line forcing
a supplier requires that channel members purchase the suppliers’ entire line to obtain any of the suppliers’ products.
Exclusive dealing
a situation in which a manufacturer forbids an intermediary to carry products of competing manufacturers.
Retailing
All transactions in which the buyer intends to consume the product through personal, family, or household use
ultimate consumers
Buyers in retail transactions are the __________
Retailer
an organization that purchases products for the purpose of reselling them to ultimate consumers. Ex: Pac-Sun, Wal-Mart
General-Merchandise retailers
a retail establishment that offers a variety of product lines that are stocked in considerable depth
Department stores
(distinctly service-oriented) large retail organizations characterized by a wide product mix and organized into separate departments to facilitate marketing efforts and internal management. Ex: Macy’s, Sears, Dillards.
Discount stores
self-service, general-merchandise stores that offer brand names and private brand products at low prices. Ex: Wal-Mart, Target, Kmart
Convenience store
small self-service store offering narrow product assortment in convenient locations. Ex: 7-Eleven
Supermarket
self-service store offering complete line of food products and some nonfood products. Ex: Publix, Kroger
Superstore
giant outlet offering all food and nonfood products found in supermarkets, as well as most routinely purchased products.Ex: Walmart Supercenters
Hypermarket
combination supermarket and discount store; larger than a superstore. Ex: Carrefour
Warehouse club(buying club)
large-scale, members-only establishment combining cash-and-carry wholesaling with discount retailing.Ex: Costco
Warehouse showroom
facility in a large, low-cost building with large on-premises inventories and minimal service. Ex: Ikea
Specialty retailers
offer substantial assortments in a few product lines.
Traditional specialty retailers (limited-line retailers)
stores that carry a narrow product mix with deep product lines. Ex: Foot Locker, The Gap Can be called single-line retailers if they carry unusual depth in one main product category.
Category killers
a very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability.Ex: Home Depot
Off-price retailers
stores that buy manufacturers’ seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts. Ex: Marshalls, Ross, T.J. Maxx
Neighborhood
shopping centers usually consisting of several small convenience and specialty stores
Community
shopping centers with one or two department stores, some specialty stores, and convenience stores
Regional
a type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers
Superregional
a type of shopping center with the widest and deepest product mixes that attracts customers from many miles away
Lifestyle
a type of shopping center that is typically open air and features upscale specialty, dining, and entertainment stores.
Power
a type of shopping center that combines off-price stores with category killers
Retail positioning
identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment
Atmospherics
the physical elements in a store’s design that appeal to consumers’ emotions and encourage buying
Category management
a retail strategy of managing groups of similar, often substitutable products produced by different manufacturers
Direct marketing
the use of telephone, Internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet.
Nonstore retailing
the selling of products outside the confines of a retail facility
Catalog marketing
type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, phone, or the internet
Direct-response marketing
a type of marketing in which a retailer advertises a product and makes it available through mail or phone orders For instance, T.V. commercial offering exercise machines
Telemarketing -the performance of marketing-related activities by phone
Television home shopping
a form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with credit card. Ex: Home Shopping Network
Online retailing
retailing that makes products available to buyers through computer connections. Ex: Office Max
Direct selling (door-to-door selling)
marketing products to ultimate consumers through face-to-face sales presentations at home or in the workplace
Party plan
consumer acts as host and invite friends and associates to view merchandise in a group setting where a sales person demonstrates products
Automatic vending
the use of machines to dispense products. Ex: Redbox
Franchising
an arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration
Wholesaling
transactions in which products are bought for resale, for making other products, or for general business operations
Wholesaler
an individual or organization that sells products that are bought for resale, for making other products, or for general business operations
Merchant
Independently owned businesses that take title to goods, assume ownership risk, and buy and resell products to other wholesalers, business customers, or retailers
Full-service wholesalers
merchant wholesalers that perform the widest range of wholesaling functions. Ex. Universal Corporation
General-merchandise wholesalers
full-service wholesalers with a wide product mix but limited depth within product lines.
Limited-line wholesalers
full-service wholesaler that carry only a few product lines but many products within those lines.
Specialty-line wholesaler
full-service wholesaler that carry only a single product line or a few items within a product line
Rack jobbers
full-service, specialty-line wholesalers that own and maintain display racks in stores
Limited-service wholesalers
merchant wholesalers that provide some services and specialize in a few function
Cash-and-carry wholesalers
customers pay cash and furnish transportation
Truck wholesalers (jobbers)
transport products directly to customers for inspection and selection
Drop shippers ( desk jobbers)
take title to goods and negotiate sales but never actually take possession of products
Mail-order wholesalers
sell products through catalogs
Agents
intermediaries that represent either buyers or sellers on a permanent basis Ex: Selling agents, Commission merchants
Broker
intermediaries that bring buyers and sellers together temporarily
Manufacturers’ agents
independent intermediaries that represent two or more sellers and usually offers customers complete product lines
Selling agents
intermediaries that market a whole product line or a manufacturers’ entire output
Commission merchants (factor merchants)
agents that receive goods on consignment from local sellers and negotiate sales in large, central markets
Sales branches (manufacturers’ wholesalers)
manufacturer-owned intermediaries that sell products and provide support services to the manufacturer’s sales force
Sale offices
manufacturer-owned operations that provide services normally associated with agents
Integrated marketing communications
coordination of promotion and other marketing efforts for maximum informational and persuasive impact
Communication
a sharing of meaning through the transmission of information
Source
a person, group, or organization with a meaning it tries to share with a receiver or audience
Receiver
the individual, group, or organization that decodes a coded message
Coding process (encoding)
converting meaning into a series of signs or symbols
Communications channel
the medium of transmission that carries the coded message from the source to the receiver
Decoding process
converting signs or symbols into concepts and ideas
Noise
anything that reduces a communication’s clarity and accuracy
Feedback
the receiver’s response to a decoded message
Channel capacity
the limit on the volume of information a communication channel can handle effectively
Promotion
communication to build and maintain relationships by informing and persuading one or more audiences
Primary demand
demand for a product category rather than for a specific brand
Pioneer promotion
informs consumers about a new product
Selective demand
demand for a specific brand
Promotion mix
a combination of promotional methods used to promote a specific product
Personal selling
paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation.
Kinesic communication
communicating through the movement of head, eyes, arms, hands, legs, or torso
Proxemic communication
communicating by varying the physical distance in face-to-face interactions
Tactile communication
communicating through touching
push policy
promoting a product only to the next institution down the marketing channel
pull policy
promoting a product directly to the consumers to develop stronger consumer demand that pulls products through the marketing channel.
word of mouth communication
personal informal exchanges of communication that customers share with one another about products, brands, and companies
Buzz marketing
an attempt to incite publicity and public excitement surrounding a product through a creative event
viral marketing
a strategy to get consumers to share a marketers message, often through email or online videos, in a way that spreads dramatically and quickly
product placement
the strategic location of products or product promotions within entertainment media content to reach the products’ target market Ex: Coke gives every judge on American idol a coca cola cup for viewers to see
Distribution
the decisions and activities that make products available to customers when and where they want to purchase them.
Supply chain
all the activities associated with the flow and transformation of products from raw materials through to the end customer.
Operations management
the total set of managerial activities used by an organization to transform resource inputs into products.
Logistics management
planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers’ needs and wants.
Supply management
in the broadest terms, refers to the process that enables the progress of value from raw material to final customer and back to redesign and final disposition.
Supply-chain management
a set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and at the right time.
Upstream firms
provide direct or indirect input to make the product.
Downstream firms
responsible for delivery of product and after-market services to the end customer.
Marketing channel
(channel of distribution or distribution channel) a group of individuals and organizations that direct the flow of products from producers to customers within the chain supply.
Marketing channels
Major role of ________ is to make products available at the right time at the right place in the right quantities.
Direct
Some marketing channels are _____, meaning that the product goes directly from the producer to the consumer.
Marketing intermediaries
middlemen that link producer to other intermediaries or ultimate consumer through contractual arrangements or through the purchase and resale of products.
Time, Place, possession, form
Marketing channels create four types of utility:
Time
available when costumers want them
Place
where customers want the products
Possession
customer has access to product to use or store for future use
Form
assembling, preparing, or otherwise refining the products to suit individual customer needs.
Industrial Distributor
an independent business organization that takes title to industrial products and carries inventory. They usually sell standardized products such as maintenance supplies, production tools, and small operating equipment.
Manufacturers agent
an independent businessperson who sell complementary products of several producers is assigned territories and is compensated through commissions.
Dual distribution
the use of two or more marketing channels to distribute the same products to the same target market. For instance, Kelloggs sells it cereal directly to large retail grocery chains and to wholesalers that, in turn sell the cereals to retailers.
Strategic channel alliance
an agreement whereby the products of one organization are distributed through the marketing channels of another.
Intensity of market coverage
is the number and kinds of outlets in which a product will be sold.
Intensive distribution
using all available outlets to distribute a product. Used a lot for convenience products
Selective distribution
using only some available outlets in an are to distribute a product. Appropriate for shopping products(T.V., stereo, etc..)
Exclusive Distribution
using a single outlet in a fairly large geographic area to distribute a product.
Channel captain
the dominant leader of a marketing channel or a supply channel (Producer, wholesaler, retailer)
Channel power
the ability of one channel member to influence another member’s goal achievement
Vertical channel integration combining two or more stages of the marketing channel under one management. Eliminating the need for that particular intermediary.
Vertical marketing systems
a marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers.
Corporate, administered and contractural
Most vertical marketing systems take one of the 3 forms:
Corporate
combines all stages of the marketing channel, from producers to consumers, under a single owner.
Administered
channel members are independent , but a high level of interorganizational management is achieved through informal coordination.
Contractual
most popular, channel members are linked by legal agreements spelling out each member’s rights and obligations.
Horizontal channel integration
combining organizations at the same level of operation under one management. For instance, owner of a dry-cleaning firm buys other existing dry-cleaning firms.
Physical distribution
(Logistics) activities used to move products from producers to consumers and other end users.
Outsourcing
the contracting of physical distribution tasks to third parties.
transportation
_______ is the most costly part of the physical distribution cycle time.
Cycle time
the time needed to complete a process
Order processing
the receipt and transmission of sales order information.
order entry, order handling, and order delivery
Order processing entails three main task
Electronic data interchange(EDI)
a computerized means of integrating order processing with production, inventory, accounting, and transportation.
Inventory management
developing and maintaining adequate assortments of products to meet customers’ needs.
Stockouts
shortages of products that, in turn, can result in brand switching, lower sales, and loss of customers.
Reorder point
the inventory level that signals the need to place a new order
Order lead time
refers to the average time lapse between placing the order and receiving it.
Usage rate
the rate at which a product’s inventory is used or sold during a specific time.
Safety stock
the amount of extra inventory a firm keeps to guard against stockouts.
Reorder point
(order lead time*usage rate) + safety stock
Just-in-time
an inventory-management approach in which supplies arrive just when needed for production or resale.
Materials handling
physical handling of tangible goods, supplies, and resources.
Unit loading
one or more boxes are placed on a pallet or skid, and later transported.
Containerization
the consolidation of many items into a single, large container that is sealed at its origin point and opened at its destination.
-Warehousing -the design and operation of facilities for storing and moving goods.
Private warehouses
company-operated facilities for storing and shipping products.
Public warehouses
storage space and related physical distribution facilities that can be leased by companies.
Bonded storage
a warehousing arrangement in which imported or taxable products are not released until the products’ owners pay U.S. customs, duties, taxes, or other fees.
Distribution centers
arge, centralized warehouses that focus on moving rather than storing goods.
Transportation
the movement of products from where they are made to intermediaries and end users.
Intermodal transportation
2 or more transportation modes used in combination
Piggyback
shipping that uses truck trailers and railway flatcars
Fishyback
trucktrailers and water carriers
Birdyback
truck trailers and air carriers
Freight forwarders
organizations that consolidate shipments from several firms into efficient lot sizes.
Megacarriers
freight transportation firms that provide several modes of shipment
Tying agreement
an agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well.
Full-line forcing
a supplier requires that channel members purchase the suppliers’ entire line to obtain any of the suppliers’ products.
Exclusive dealing
a situation in which a manufacturer forbids an intermediary to carry products of competing manufacturers.
Retailing
All transactions in which the buyer intends to consume the product through personal, family, or household use
ultimate consumers
Buyers in retail transactions are the __________
Retailer
an organization that purchases products for the purpose of reselling them to ultimate consumers. Ex: Pac-Sun, Wal-Mart
General-Merchandise retailers
a retail establishment that offers a variety of product lines that are stocked in considerable depth
Department stores
(distinctly service-oriented) large retail organizations characterized by a wide product mix and organized into separate departments to facilitate marketing efforts and internal management. Ex: Macy’s, Sears, Dillards.
Discount stores
self-service, general-merchandise stores that offer brand names and private brand products at low prices. Ex: Wal-Mart, Target, Kmart
Convenience store
small self-service store offering narrow product assortment in convenient locations. Ex: 7-Eleven
Supermarket
self-service store offering complete line of food products and some nonfood products. Ex: Publix, Kroger
Superstore
giant outlet offering all food and nonfood products found in supermarkets, as well as most routinely purchased products.Ex: Walmart Supercenters
Hypermarket
combination supermarket and discount store; larger than a superstore. Ex: Carrefour
Warehouse club(buying club)
large-scale, members-only establishment combining cash-and-carry wholesaling with discount retailing.Ex: Costco
Warehouse showroom
facility in a large, low-cost building with large on-premises inventories and minimal service. Ex: Ikea
Specialty retailers
offer substantial assortments in a few product lines.
Traditional specialty retailers (limited-line retailers)
stores that carry a narrow product mix with deep product lines. Ex: Foot Locker, The Gap Can be called single-line retailers if they carry unusual depth in one main product category.
Category killers
a very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability.Ex: Home Depot
Off-price retailers
stores that buy manufacturers’ seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts. Ex: Marshalls, Ross, T.J. Maxx
Neighborhood
shopping centers usually consisting of several small convenience and specialty stores
Community
shopping centers with one or two department stores, some specialty stores, and convenience stores
Regional
a type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers
Superregional
a type of shopping center with the widest and deepest product mixes that attracts customers from many miles away
Lifestyle
a type of shopping center that is typically open air and features upscale specialty, dining, and entertainment stores.
Power
a type of shopping center that combines off-price stores with category killers
Retail positioning
identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment
Atmospherics
the physical elements in a store’s design that appeal to consumers’ emotions and encourage buying
Category management
a retail strategy of managing groups of similar, often substitutable products produced by different manufacturers
Direct marketing
the use of telephone, Internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet.
Nonstore retailing
the selling of products outside the confines of a retail facility
Catalog marketing
type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, phone, or the internet
Direct-response marketing
a type of marketing in which a retailer advertises a product and makes it available through mail or phone orders For instance, T.V. commercial offering exercise machines
Telemarketing -the performance of marketing-related activities by phone
Television home shopping
a form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with credit card. Ex: Home Shopping Network
Online retailing
retailing that makes products available to buyers through computer connections. Ex: Office Max
Direct selling (door-to-door selling)
marketing products to ultimate consumers through face-to-face sales presentations at home or in the workplace
Party plan
consumer acts as host and invite friends and associates to view merchandise in a group setting where a sales person demonstrates products
Automatic vending
the use of machines to dispense products. Ex: Redbox
Franchising
an arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration
Wholesaling
transactions in which products are bought for resale, for making other products, or for general business operations
Wholesaler
an individual or organization that sells products that are bought for resale, for making other products, or for general business operations
Merchant
Independently owned businesses that take title to goods, assume ownership risk, and buy and resell products to other wholesalers, business customers, or retailers
Full-service wholesalers
merchant wholesalers that perform the widest range of wholesaling functions. Ex. Universal Corporation
General-merchandise wholesalers
full-service wholesalers with a wide product mix but limited depth within product lines.
Limited-line wholesalers
full-service wholesaler that carry only a few product lines but many products within those lines.
Specialty-line wholesaler
full-service wholesaler that carry only a single product line or a few items within a product line
Rack jobbers
full-service, specialty-line wholesalers that own and maintain display racks in stores
Limited-service wholesalers
merchant wholesalers that provide some services and specialize in a few function
Cash-and-carry wholesalers
customers pay cash and furnish transportation
Truck wholesalers (jobbers)
transport products directly to customers for inspection and selection
Drop shippers ( desk jobbers)
take title to goods and negotiate sales but never actually take possession of products
Mail-order wholesalers
sell products through catalogs
Agents
intermediaries that represent either buyers or sellers on a permanent basis Ex: Selling agents, Commission merchants
Broker
intermediaries that bring buyers and sellers together temporarily
Manufacturers’ agents
independent intermediaries that represent two or more sellers and usually offers customers complete product lines
Selling agents
intermediaries that market a whole product line or a manufacturers’ entire output
Commission merchants (factor merchants)
agents that receive goods on consignment from local sellers and negotiate sales in large, central markets
Sales branches (manufacturers’ wholesalers)
manufacturer-owned intermediaries that sell products and provide support services to the manufacturer’s sales force
Sale offices
manufacturer-owned operations that provide services normally associated with agents
Integrated marketing communications
coordination of promotion and other marketing efforts for maximum informational and persuasive impact
Communication
a sharing of meaning through the transmission of information
Source
a person, group, or organization with a meaning it tries to share with a receiver or audience
Receiver
the individual, group, or organization that decodes a coded message
Coding process (encoding)
converting meaning into a series of signs or symbols
Communications channel
the medium of transmission that carries the coded message from the source to the receiver
Decoding process
converting signs or symbols into concepts and ideas
Noise
anything that reduces a communication’s clarity and accuracy
Feedback
the receiver’s response to a decoded message
Channel capacity
the limit on the volume of information a communication channel can handle effectively
Promotion
communication to build and maintain relationships by informing and persuading one or more audiences
Primary demand
demand for a product category rather than for a specific brand
Pioneer promotion
informs consumers about a new product
Selective demand
demand for a specific brand
Promotion mix
a combination of promotional methods used to promote a specific product
Personal selling
paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation.
Kinesic communication
communicating through the movement of head, eyes, arms, hands, legs, or torso
Proxemic communication
communicating by varying the physical distance in face-to-face interactions
Tactile communication
communicating through touching
push policy
promoting a product only to the next institution down the marketing channel
pull policy
promoting a product directly to the consumers to develop stronger consumer demand that pulls products through the marketing channel.
word of mouth communication
personal informal exchanges of communication that customers share with one another about products, brands, and companies
Buzz marketing
an attempt to incite publicity and public excitement surrounding a product through a creative event
viral marketing
a strategy to get consumers to share a marketers message, often through email or online videos, in a way that spreads dramatically and quickly
product placement
the strategic location of products or product promotions within entertainment media content to reach the products’ target market Ex: Coke gives every judge on American idol a coca cola cup for viewers to see